Energy Transfer Raises Bid For Southern Union

Energy Transfer Equity, the Texas-based master limited partnership, has raised its takeover offer for pipeline operator Southern Union to $5.1 billion from a previous offer of $4.2 billion in an effort to stymie an acquisition bid valued at close to $4.9 billion by Williams Cos.

Energy Transfer's (ETE) latest offer includes the assumption of $3.7 billion in Southern Union debt. The offer has been accepted by the boards of both companies. Southern Union investors can exchange their shares for $40 in cash or 0.903 common units of Energy Transfer, according to Bloomberg News.

Last week, Oklahoma-based Williams (WMB) and Texas-based Southern Union (SUG) confirmed they had entered into exclusive talks regarding a takeover by Williams. Analysts have speculated that Williams will make another competing offer.

An Energy Transfer-Southern Union combination would create one of the largest pipeline operators in the U.S. and Energy Transfer said Southern Union's assets fit with it better than any other company, the company appears pensive about entering into a drawn-out bidding war for Southern Union.

Williams said it is currently evaluating its options in the wake of the higher bid from Energy Transfer, Bloomberg reported.